The Political Business Cycle Refers to

question 8

Multiple Choice

The political business cycle refers to

• A)the fact that about every four years some politician advocates greater government control of the Fed.
• B)the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected.
• C)the part of the business cycle caused by the reluctance of politicians to smooth the business cycle.
• D)changes in output created by the monetary rule the Fed must follow.

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Definitions:

Estimated Regression Equation

An equation derived from regression analysis that predicts the dependent variable based on the values of one or more independent variables.

Y-Intercept

The point at which a line or curve intersects the Y-axis of a graph.

Regression Source Table

A table containing statistical information that summarizes the output of a regression analysis.

Model Significant

An indication that the model's predictions significantly differ from what would be expected by chance.